| Abstract [eng] |
The conducted research is timely and relevant, as it provides a comparative perspective on how personal income tax (PIT) policy affects income differentiation in the European Union. It contributes to both academic and policy debates by integrating theoretical analysis with empirical evidence. The novelty of the study lies in combining statistical data analysis—including Gini coefficients and other inequality indicators—with case studies of tax reforms in selected countries. The aim of the study is to analyse the theoretical principles of the interaction between income inequality and personal income tax, and to empirically assess the impact of PIT on income inequality in EU member states. The research problem addresses the extent to which changes in PIT influence income inequality across EU countries. While public finance theory suggests that a progressive PIT should reduce inequality, empirical findings for EU member states remain mixed in both direction and magnitude. Existing studies often examine individual redistribution mechanisms or focus on short time periods, resulting in a lack of comprehensive assessments of how PIT changes affect income differentiation over longer periods and across diverse institutional and fiscal environments. In this study, the theoretical principles of the interaction between the tax system and income inequality are evaluated, with particular attention to the role of PIT in redistribution and the logic of progressivity. The dynamics of income inequality indicators in EU countries and their relationship with different PIT structures are analysed. The empirical part includes correlation analysis and panel data regression for the selected period, aiming to determine the magnitude of PIT effects on income differentiation. In addition, the impact of specific PIT reforms on income inequality and poverty risk in EU countries is assessed to understand how tax policy changes shape the social and economic environment. The structure of the thesis is as follows: the first chapter examines theoretical aspects of taxation and income differentiation, presenting key concepts, models, and tax system characteristics. The second chapter discusses the research methodology, including research tools, sample, design, and limitations. The third chapter presents the empirical results, covering cross country comparisons and detailed case studies. The thesis also includes an introduction, summary, conclusions, list of tables, references, and appendices. The research results reveal that personal income tax (PIT) is the most statistically significant factor in reducing income inequality in the European Union. Panel data analysis shows that higher PIT progressivity and higher effective tax rates are associated with lower Gini coefficients, and this relationship remains stable across different econometric specifications. It is also found that a higher labour tax wedge and a higher level of economic development (GDP per capita) contribute to reducing income differentiation, which aligns with the welfare state models discussed in the theoretical section. The effect of social expenditures is weaker and highly dependent on country specific structural factors, meaning that their relationship with inequality is less clear than that of tax policy instruments. Overall, the study demonstrates that tax policy is an effective and important tool in shaping income distribution patterns in EU countries, and its impact is clearer and more consistent than that of other fiscal measures. |
